Perhaps Carracedo's confidence and realistic attitude stem from his two internships. As an undergraduate, he interned with Gary Silverman, owner of the one-man Wichita Falls shop Personal Money Planning. "This was tremendous exposure," says Carracedo. "My job included filling out forms, scanning and working on a job task analysis for the firm, but Gary's willingness to answer any and all questions was invaluable. I could ask him about anything I was reading and learning about. He was an excellent sounding board."
As a graduate student, Carracedo spent time at Quest Capital Management in Dallas, a 30-person firm. "I saw both sides of the spectrum [large and small]. At Quest, I sat in on lots of client meetings as a fly on the wall and got to see what really goes on. We'd talked about client meetings in the classroom, but this was a firsthand opportunity to see how an advisor delivers a plan and adds value to the client relationship."
And then I asked him the sticky question ... how much do you expect Austin to pay you? "Most students at Texas Tech expect average starting salaries in the $40,000 to $50,000 range. Some get more, some get less. A lower starting salary might be offered in a job that eventually leads to a partnership opportunity, or a higher starting salary might lead nowhere. So I'd look at the nature of the opportunity." In other words, Carracedo would probably expect somewhere around the average. (Interestingly, a "Level 3 Paraprofessional," according to the 2007 Moss Adams Compensation Survey, earns a median salary of $55,000.)
Let's see if any of his expectations are in line with what Austin would offer Carracedo.
McDonald, Austin's founder and president, pointed out first that Carracedo is a master's student. "We'd probably get a year out of him, assuming he hasn't gotten his CFP yet." McDonald's attitude is cautious because most business owners have to make a choice: to select either highly educated people who can be retrained or people with less education who can be shaped. Added McDonald, "We might need to get him out of bad habits into good habits. We're life planners here; the new employee needs to understand how we expect them to work."
That said, the career path McDonald would offer is strikingly similar to the one Carracedo expected. "He'd start with a two-year internship as a paraplanner in a support role," McDonald says. "On day one, he would sit in client meetings as part of a collaborative team. While his job might consist of making copies and taking notes, his observations would be his most important contribution."
McDonald would expect Carracedo to note how the other team members performed as well as create "action notes," which tell the team, "Here's what we need to do for this client." Carracedo would also be responsible for planning software data input so that when the team's financial planner pulls up the client file, it's 80% to 90% accurate. "We're looking for close to perfection, but not perfection," says McDonald. "The team's financial planner should be able to make initial, rough recommendations for the client from these data [that Carracedo has entered.]"
After 18 months (or the time required to pass the CFP exam), McDonald says Carracedo would be promoted to a financial planner role on his team for another 18 to 24 months. "He wouldn't be a lead planner, but he would help design a book of business. Initially, he'd be with easier clients, maybe those with $1 million to $2 million of fairly liquid assets. Ultimately, he'd be responsible for 50 to 60 clients representing more financially-and emotionally-sophisticated cases."
Carracedo expects to earn $40,000 to $50,000 as a paraplanner. McDonald says he'd offer him $45,000 to $48,000 to start. (Do I get a finder's fee for this?)
Amanda Newton is a 21-year-old undergrad at Texas Tech with a 4.0 grade point average and an expected graduation month of December 2008. Her degree will be a Bachelor of Science in personal financial planning.